City warns of Brexit exodus as Citigroup shifts hub to Frankfurt

Financial Conduct Authority (FCA) chief executive Andrew Bailey said City firms are nearing the point they will have to take steps to move staff to ensure they can operate seamlessly once the UK leaves the EU in March 2019, as reported in the UK media.

“By the end of this year, their plans tell them that in order to have things in place, they’ve got to implement them,” said Bailey.

“Without a transition agreement, they will be having to do so without knowing the outcome of the negotiations. Firms were not moving their business yet,” he said, but they were talking “more in terms of getting there.”

The Bank of England called on hundreds of City firms to submit their Brexit plans by 14 July.

Citigroup makes the move

The bank reportedly plans to extend its broker-dealer in the southern German city and will create 150 to 250 new jobs there, either by moving existing employees or hiring locally.

Citigroup – which employs 9,000 people in the UK – already has about 350 employees in Frankfurt and is seen moving some of its trading activities now done in London, which UK will remain the headquarters for Europe, the Middle East and Africa.

Citigroup has been considering the move for several months and looked at locations in Ireland, Spain, Italy, Germany, France and the Netherlands, Jim Cowles, the bank’s top executive for the region, said at a Dublin conference in January.

Senior management said then they had been using 25 criteria to help them decide which financial centre to chose for its EU center.

If it loses the key “passporting rights” it currently uses to conduct business across the EU. These mean that banks can operate out of London in other members of the EU without the need for extra regulatory approval.

• What Germans think about the Brexit negotiations

  May made a mess of it

  Johannes Bader: I think the Europeans have a far stronger hand in the Brexit negotiations. Theresa May made a complete mess of things in the snap election that just happened. It’s total chaos. But that’s all I know about it.

• What Germans think about the Brexit negotiations

  Divisions are no good for the future

  Johannita Müller: I hope Europe has the better cards. I really do. It’s not good for the future if there are divisions everywhere. I would hope that the British back away from the Brexit.

• What Germans think about the Brexit negotiations

  The UK has its work cut out for it

  Peter Gutthat: First of all, I think it’s regrettable that things even got this far. I think it’s a step backwards for Europe. The UK is going to have its work cut out for it to get a decent result. Europe can’t afford to let them get away with having any advantages.

• What Germans think about the Brexit negotiations

  You just have to laugh

  “Klaus Humboldt” (wished to remain anonymous): I love British humor, and with the Brexit and the election you just have to laugh. They’re making themselves look ridiculous. May is completely kaput. But I don’t know whether the EU has the better cards or not. I’m sure everyone will be fighting tooth and nail.

• What Germans think about the Brexit negotiations

  Hold another vote now

  Ursula Stampf: They should hold another election. I think that the Brexit is a total shame. So they should vote again on it. That’s all I have to say.

• What Germans think about the Brexit negotiations

  Why shouldn’t I be relaxed?

  Edgar Maas: I don’t know what’s going to happen. It may very well be that in two years the British hold another election to decide whether they truly want Brexit after all. I don’t think they be able to complete all the negotiations by then in any case. But it doesn’t really affect me. So why shouldn’t I be relaxed?

  Author: Jefferson Chase

BaFin, the German regulator, is widely seen as the only regulator outside of London capable of handling the bank’s complicated derivatives business, about moving some of its London-based equity and interest-rate derivatives traders to Frankfurt. 

Frankfurt is a natural pick for many international companies with Deutsche Bank, the ECB and BaFin already in situ.

Exodus

Barclays said recently it is talking to regulators in Dublin to discuss expansion, while JP Morgan has also been discussing plans with regulators in the Irish capital.

Standard Chartered, Nomura, Sumitomo Mitsui and Daiwa Securities picked Frankfurt as their EU hub in recent weeks. Deutsche Bank is preparing to move large parts of the trading and investment-banking assets it currently books in London to its hometown of Frankfurt.

HSBC has said it could move 1,000 staff from London to Paris.

Article source: http://www.dw.com/en/city-warns-of-brexit-exodus-as-citigroup-shifts-hub-to-frankfurt/a-39755095?maca=en-rss-en-bus-2091-xml-atom